NEW DELHI The Supreme Court gave the go-ahead on Monday for the auction of around 11.46 million tonnes of iron ore already mined in Goa, potentially doubling the country's exports this year to top market China if overseas sales are allowed.
The court also said it would set up a panel to decide on a cap for Goa's iron ore output and this should submit an interim report by February 15, 2014, leaving mining still on hold.
"We are setting up a six-member expert committee to study the cap on production based on carrying capacity of roads and such," Justice A.K. Patnaik said in the Supreme Court.
He did not specify whether the iron ore could be exported after auction. The Supreme Court imposed a ban on exports and production in Goa last year in a crackdown on illegal mining.
The move to allow the sale of mined ore, and the potential export of the same, is unlikely to have any significant impact on the global iron ore supply chain and prices, with the mining ban in Goa remaining for now.
While analysts expect a gradual recovery in Indian exports over the next two years, the pace is likely to be modest and far from the record high of more than 117 million tonnes set in the fiscal year through March 2010.
Spot iron ore prices have fallen about 15 percent from this year's peak of near $160 a tonne as a slower economy curbs Chinese demand while top miners Rio Tinto (RIO.AX) (RIO.L) and BHP Billiton (BHP.AX) (BLT.L) continue to ramp up output.
India used to be the world's third-largest exporter of iron ore, shipping out ore worth more than $7 billion per year, with much of that from Goa state. But restrictions in Goa and neighbouring Karnataka have slashed output and exports.
India's shipments to China have slowed to a trickle at just over 8 million tonnes from January to September, down 75 percent from a year before.
Most of Goa's iron ore goes to China, fetching about $75 per tonne for low-grade ore of less than 52 percent iron content. But domestic steelmakers are also eager for supplies.
Sesa Goa Ltd SESA.NS, India's top private-sector mining company and a unit of London-listed Vedanta Resources Plc (VED.L), would be the biggest beneficiary if mining resumed in Goa, as it is the largest producer in the state.
Sesa Goa shares were down 0.55 percent at 1019 GMT, slightly outperforming the BSE Sensex.
(Additional reporting by Suchitra Mohanty and by Swetha Gopinath in Bangalore; Editing by Alan Raybould)
Trending On Reuters
Oil and Natural Gas Corp , India's biggest oil explorer, reported on Thursday a surprise 12 percent rise in fourth-quarter net profit, helped by a one-off gain. Full Article